Contents :

• INTRODUCTION
  
  Telekom Malaysia Berhad (“TM”) wishes to announce that its wholly-owned subsidiary, TM Facilities Sdn. Bhd. (“TM Facilities”) has on 3 March 2005, entered into a Joint Land Development Agreement (“JLDA”) and Memorandum of Understanding (“MoU”) [collectively known as “the Agreements”] with IDH-Indahijau (M) Sdn. Bhd. (“IDH”) to jointly develop twelve (12) pieces of land belonging to TM Facilities held under Lot No(s): 2, 439, 551 and 998, 1000, 1288, 1290, 1293, 1321, 1324, 1351 and 3246, all in the Mukim of Rembau, District of Pedas, Negeri Sembilan, measuring approximately 1,058 acres (“the Land”).
  
  BRIEF INFORMATION ON TM FACILITIES
  
  TM Facilities is a wholly owned subsidiary of TM, and its principal activity is the provision of facilities management services and property development. The authorised capital of TM Facilities is RM5,000,000 divided into 5,000,000 ordinary shares of RM1 each and its issued and paid-up capital is RM2,300,000 comprising of 2,300,000 ordinary shares of RM1 each.
  
  BRIEF INFORMATION ON IDH
  
  IDH is a private company limited by shares with diverse experience in land development, landscaping, contracting, agro-farming including sales and marketing of properties in related industry. The authorised capital of IDH is RM1,000,000 divided into 1,000,000 ordinary shares of RM1 each, of which RM750,000 is issued and fully paid.
  
  SALIENT FEATURES OF THE AGREEMENTS
  
  TM Facilities shall jointly develop the Land measuring 768 acres (“the Project Land”) with IDH by carrying out the amalgamation, sub-division and to develop the Project Land under the concept of “Homestead/Orchard Village” for the purpose of sale together with necessary infrastructure (hereinafter referred to as “the Development") in accordance with the approved plans and specifications and subject to the terms and conditions as stated in the JLDA.
  
  TM Facilities shall provide and make available the Project Land and IDH shall provide the technical, financial, commercial and management expertise and shall develop the Project Land in accordance with the provisions of the JLDA.
  
  IDH shall pay to TM Facilities, a Guaranteed Land Cost in respect of the 768 acres of Project Land calculated at RM54,022 per acre resulting in a total of RM41,488,722 i.e. subsequent to the sale of the sub-divided lots of each and every phase of the Development as per the terms and conditions of the JLDA. The development will be carried out in 4 phases and spread over to 4 - 5 years.
  
  In addition to the Guaranteed Land Cost, IDH will share 10% of the Profit Before Tax (estimated to be RM1,500,000) with TM Facilities on or before the expiry of development period.
  
  The JLDA sets out the terms and conditions of the development of the Project Land whereas the MoU was executed for the purpose of governing the intentions of TM Facilities and IDH to transfer and accept, respectively a portion of the Land totaling 290 acres (“the Sale Land”) at a total consideration of RM9,960,000.
  
  RATIONALE FOR THE JLDA
  
  The JLDA is an initiative by TM to develop its land bank jointly with experienced parties to create value for TM Group and its shareholders.
  
  FINANCIAL EFFECTS
  
  The JLDA will not have any material effect on TM Group’s NTA for the financial year ending 31 December 2005 and is expected to contribute positively to the earnings of TM Group.
  
  DIRECTORS’ AND SUBSTANTIAL SHAREHOLDERS’ INTEREST
  
  In so far as the Directors of TM are aware, none of the Directors nor the major shareholders of TM and/or persons connected to them have any interest, whether direct or indirect, in the JLDA.